To readers of the board who do not follow the adventure gaming business, this may seem off topic, but bear with me- the business is often a leading indicator of popular culture (Pokemon), and new creative talent emerging. WOTC, and Hasbro, may well be close to totally controlling this market, and therefore dramatically boosting the future value of the WOTC/HAS franchise.

Last month, Kergillian and I were discussing the possible consolidation of the middle tier companies in the adventure game industry. I have been recieving some information from industry publications that this may be indeed happening- though not in the way Kergillian and I had envisioned.

Item: (October) A WOTC executive leaks that WOTC may wish to use the introduction of Third Edition Dungeons and Dragons as an opportunity to underprice competitors, and DRAMATICALLY increase market share.

Item: a breakdown of market share in the RPG (Role Playing Game) Market:

NB: this market segment may add up to about $100 million in sales anually.

Item: (1st week January) Pyramid magazine, the house publication of Steve Jackson Games (SJG) runs a curious article on the future of the business, including a *most* curious prediction: that there would only be three game systems on the market for RPG's- D&D 3e, GURPS, and FUDGE (a free system published over the internet).

The author stated that this would come about due to the game systems being universal in nature (universal systems, which cover multiple genres have not done all that well historically, as the market share for GURPS shows), and (this phrase struck me when I read it) "unique new licensing agreements" that would allow publishers to put out materials for other companies roleplaying game systems. Another claim that was made that SJG would ship 60 titles a year (last year they shipped 25, half of which were reprints). Most curious, I thought at the time...

Final item (tonight): WOTC leaks that they may be planning to OPEN SOURCE Dungeons and Dragons!

WHOOP WHOOP! WHOOP WHOOP! ALERRRRRT!

(Gee, Steve Jackson didn't know this was coming?)

What Does It All Mean?

A) WOTC consolidates the industry by itself. Developers and freelancers are paid generously by WOTC (WOTC retains the IP rights to D&D, freelancers get rights to publish under generous license agreements). Competitors get crushed in price and quality competition. A vicious cycle develops where only "freeware" can survive vs WOTC products in price, but not in quality.

B) WOTC captures the talent. (The average freelancer makes about $25K/year at best, making the choice of who to produce for obvious). Since people in this business who show promise often leave for greener pastures, WOTC gets first crack at them. In short, the studio system. Don't laugh. These will be the media developers of tomorrow. This is the most important development for holders of HAS stock: intellectual capital.

WOTC and HAS get a lock on the money and the ideas. Good news for HAS stock, bad news for vanity publishers.

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